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Interest In Digital Advertising Reaches an All-Time High As TV Slows To Three-Year Low, New STRATA Study Finds—Digital Spending Fueled by Online Video, Social and Online Radio

Focus on television advertising has hit a three-year low as the gap between TV and digital narrowed to its closest point ever, according to the most recent quarterly survey compiled by media buying and selling software firm STRATA.

Interest in digital advertising is closing in as several popular social media sites reached previously unseen levels of agency interest last quarter. TV advertising still remains the top advertising medium with 44% of survey respondents saying they are more interested in advertising on TV (spot TV/cable) than any other medium. While TV is still number one, this represents the lowest level of broadcast advertising interest seen in the STRATA quarterly survey in nearly three years. Gaining steadily on TV, digital is the second most popular medium at 35%, the largest share of interest it has received in the survey’s five-year history.  Digital is up 16% over last year.

"It is no surprise that digital has become an integral component for many advertising campaigns. Now, the only question that remains is how close the interest in TV and digital advertising will become in the future," said John Shelton, president and CEO of STRATA, in a news release. "Moving forward, we expect to see ad dollars split even more evenly between traditional media and the newer avenues that continue to gain market share, such as mobile and social media."

Many of the non-traditional mediums continued to gain advertiser attention last quarter. Sixty-one percent said video (including TV, cable, network and streaming) was the main area of focus for their overall campaigns. Sixty-six percent of respondents were more interested in online video than last year. YouTube is the top online video site for agencies (69%), Hulu is second (35%), and Netflix and Vine are tied for third (14%).

"While we’ve seen a lot of growth in video advertising, we’re just touching the tip of the advertising iceberg as Facebook, Twitter and others continue to expand their video offerings. We’re expecting more online video advertising orders to go through our system moving forward due to the demand from media buyers and the increased capabilities of the sellers," said Shelton.

Streaming/online radio continues to see momentum with 58% saying they are more interested in it than a year ago. Interest in traditional radio advertising continues to fall as 86% said their clients were interested in traditional radio at the same level or less than last year, representing the lowest rate of interest for radio seen in 19 quarters.

Facebook (90%), YouTube (55%), Twitter (53%), LinkedIn (35%) and Pinterest (25%) all reported record highs for agency campaigns. A large majority (74%) use free social media to support client campaigns and 25% say they see a better ROI on paid social compared to free. Eleven percent experience a better ROI on free social.

The ad economy generally looks healthy as over half of the agencies polled experienced an increase in business compared to this time last year. Client attraction remains a main challenge for agencies (41%) and client spending is the next biggest challenge for agencies (21%). Client spending historically gets a spike in the second quarter as a major concern for ad agencies due to the completion of the ad orders from the first half of the year and uncertainty over ad spend for the next half of the year.

Other key findings:

  • 28% feel they will have a greater spend in Digital than Traditional in 1-3 years. 27% say they don’t ever anticipate a greater spend in Digital (down 45% and the lowest percentage ever).
  • A vast majority of agencies choose to advertise via display ads on other mobile content (76%) rather than build mobile sites or applications themselves.
  • Most agencies seem content with their current staffing situations. 24% of agencies plan on hiring (Down 22% from last quarter) and 72% are keeping staff numbers the same.
  • 23% feel the economy and their business has returned to a strong growth period, while 26% expect that to occur by early 2014.

Edited by Richard Carufel

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